Flight cancellations and delays have cost airlines over $600 million in refunds since the beginning of the COVID-19 pandemic and the ensuing government restrictions, impacting hundreds of thousands of passengers, according to the Department of Transportation (DOT).
With Federal regulators investigating numerous instances of airlines accused of breaking refund rules, the $600-million price tag may grow even larger.
Half-a-dozen airlines are set to receive fines collectively totaling over $7 million for “extreme delays in providing those refunds to passengers,” explained Transportation Secretary Pete Buttigieg.
Domestically, only one U.S. airline, the low-cost carrier Frontier, faced penalties for excessive hold-ups in issuing refunds.
Outside of the U.S., TAP Portugal, Aeromexico, El Al, Avianca, and Air India, were the primary carriers subject to fines.
“[W]hen Americans buy a ticket on an airline, we expect to get to our destination […] and our job at DOT is to hold airlines accountable for these expectations, many of which are a matter of law and regulation,” Buttigieg said.
According to DOT, roughly 20% of the over 7,000 consumer complaints received last month were concerning refunds.
Blane Workie, DOT assistant general counsel for the Office of Aviation Consumer Protection, said the reimbursement process varies between carriers. What one airline considers a reasonable event warranting a refund may differ from that of another.
At the start of the pandemic, for example, Frontier changed how it defines a “significant schedule change,” essentially “retroactively applying a more stringent rule to consumers,” explained Workie.
While some are concerned that DOT’s approach could deter airline business in the U.S., but Workie disagreed.
According to her, the governmental organization’s “overall objective is to make sure passengers get their money back.”
Moreover, Workie thought that DOT’s enforcement action could help prevent similar activity in the future.
DOT is showing no signs of slowing its enforcement action against tardy carriers. Buttigieg said that more investigations are forthcoming, and “there may be more news to come by way of fines.”
It has also armed the public with a new dashboard to help passengers understand what they are owed when flight disruptions occur.
The 2022 holiday season will once again test the will of fliers and the ability of airlines to deliver amid a surge in passenger traffic and poor weather. DOT anticipates this season will be “among the busiest” in the past three years.
So long as the airline industry’s refund process remains slow and complex, DOT will continue its enforcement efforts undeterred.
“It shouldn’t take an enforcement action from the US Department of Transportation to get airlines to pay refunds that they’re required to pay,” said Buttigieg.
